Senate Finance Committee’s Connection with Oil, American Solutions Changes Strategies and More in Capital Eye Opener: May 13

Your daily dose of news and tidbits from the world of money in politics:

OIL MONEY AND FINANCE COMMITTEE MEMBERS: The Senate Finance Committee conducted a hearing Thursday on whether to end tax breaks for the nation’s five biggest oil companies. Senate Democrats have proposed eliminating $21 billion in tax cuts during the next 10 years, as they say this will help reduce the nation’s budget deficit.

Chevron Corp Chief Executive John Watson argued that the tax increases would “hinder development of energy supplies needed to moderate rising energy prices. It will mean fewer dollars to state and federal treasuries … and fewer jobs–all at a time when our economic recovery remains fragile.”

The five companies represented at the hearing were BP, Chevron, ConocoPhillips, Exxon Mobil and Shell Oil. They are all politically active and have, in recent years, spent tens of millions of dollars on lobbying and political donations. Historically, the oil and gas industry leans Republican with an average of 76 percent of political donations going to Republicans. See OpenSecrets.org’s oil and gas industry profile here.

The chart below shows how much money each member of the Senate Finance Committee has received in their career from the oil and gas industry’s political action committees. Sen. John Cornyn (R-Texas) tops the list receiving more than $314,000. The last column shows what percentage of a member’s political action committee money comes from the oil and gas industry.

Interestingly, Public Campaign Action Fund points out that Sen. Mike Crapo (R-Idaho) attended a fund-raiser an hour before the hearing that was co-hosted by a lobbyist who represents BP. One of the seven hosts was Aleix Jarvis, a lobbyist for Fierce, Isakowitz & Blalock. So far, BP has paid this lobbying firm $60,000.

AMERICAN SOLUTIONS CHANGES STRATEGIES: Newt Gingrich’s political strategy and fund-raising organization, American Solutions for Winning the Future, will not fade away now that Gingrich is running for president. Politico reported that the so-called 527 organization will morph into a 501(c)(4) non-profit organization.

This means the organization can continue to raise unlimited amounts of money from any source. But as a 501(c)(4), the nonprofit will not be required to disclose its donors.Such nonprofit organizations spent $134.4 million on political advertisements during the 2010 election period — accounting for 44 percent of all outside group spending. Much of this spending was allowed because of the Supreme Court decision Citizens United v. Federal Election Commission.

American Solutions for Winning the Future told Politico that becoming a 501(c)(4) nonprofit would give the group more “flexibility to engage in state and local issues and to take contributions from charitable organizations”. By law, however, 501(c)(4) organizations, which are defined by the Internal Revenue Service as “social welfare” organizations, are not supposed to have a primary purpose of engaging in political activity.

ETHICS COMMITTEE REFERS ENSIGN’S CASE TO THE FEDS: The Senate Ethics Committee has asked federal agencies to investigate former Sen. John Ensign (R-Nev.), saying there is “substantial and credible evidence” that Ensign broke federal laws while trying to cover up an affair with a political aide.

This is the first time since 1995 that the Senate Ethics committee asked federal agencies to investigate a former or current senator. After Ensign had an affair with one of his political aides, Cynthia Hampton, he tried to cover it up.

The Washington Post reported that the most prominent accusation was that Ensign violated the federal “cooling off” laws when he helped Hampton’s husband, Douglas Hampton, gain lobbying employment after working as an aide to the senator. See the Ethics Committee’s letter to the attorney general here.

The report alleges that the $96,000 that Ensign’s parents gave to the Hampton family, as a gift, amounted to severance pay and broke federal campaign finance laws. Ensign also provided false statements to the Federal Election Commission.

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